[ET Net News Agency, 2 April 2020] Huatai Research lowered its target price for China
Eastern Airlines (CEA)(00670) to HK$4.7 from HK$5.45 and maintained its "buy" rating as
COVID-19 is abating in mainland China and its impact on airlines is likely fully priced
in.
The research house said CEA's 2019 net profit of RMB3,192mn was 36% below Huatai's
estimate on higher interest costs for lease liabilities under IFRS16 and weak demand in 4Q
2019 off-season.
As COVID-19 has hit air travel demand badly year to date, Huatai cut its 2020 net profit
estimate by 91.8% to RMB592mn. Huatai raised its 2021 net profit forecast by 21%. It
thinks CEA's earnings and stock price will rebound after the one-off impact. (KL)